On Thursday, shares in two meme stocks soared, adding an unexpected twist to a stock market that had been falling in tumultuous trading for more than a month.
GameStop’s stock soared more than 20% and was repeatedly suspended due to high volatility. The shares of movie theatre chain AMC Entertainment increased by 18%.
Early last year, a group of retail investors coordinated transactions on online chatrooms to produce significant short squeezes in GameStop and AMC, which were highly despised by hedge funds and other participants. Many hedge funds and other short sellers involved in these speculative names suffered large losses as a result of the stratospheric surges.
Short-sellers have begun to construct positions again after the equities have receded from their top values. FactSet estimates that